Northwest Gas (NWN) AI Stock Analysis

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Northwest Gas

(NYSE:NWN)

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Outperform 73 (OpenAI - 4o)

Rating:73Outperform

Price Target:

$52.00

▲(12.68% Upside)

Northwest Gas's overall score reflects strong earnings call highlights, including robust customer growth and strategic expansions, which are the most significant factors. The technical analysis supports a positive trend, while valuation remains fair with an attractive dividend yield. Financial performance is stable but challenged by high leverage and negative free cash flow.

Positive Factors

Customer Growth

Strong customer growth, particularly from acquisitions, indicates expanding market presence and potential for increased revenue.

Regulatory Achievements

Favorable regulatory outcomes enhance revenue stability and provide a solid foundation for future growth and investment.

Dividend Stability

Consistent dividend growth reflects financial stability and a strong commitment to returning value to shareholders.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting long-term financial health.

Negative Free Cash Flow

Negative free cash flow suggests challenges in covering net income, which could hinder reinvestment and growth opportunities.

Higher Interest Expenses

Rising interest expenses can erode profitability and strain cash flow, affecting the company's ability to finance future growth.

Northwest Gas (NWN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.91B

Dividend Yield4.26%

Average Volume (3M)257.55K

Price to Earnings (P/E)18.3

Beta (1Y)0.18

Revenue Growth11.27%

EPS Growth20.04%

CountryUS

Employees1,452

SectorUtilities

Sector Strength65

IndustryRegulated Gas

Share Statistics

EPS (TTM)-0.73

Shares Outstanding41,507,042

10 Day Avg. Volume243,009

30 Day Avg. Volume257,546

Financial Highlights & Ratios

PEG Ratio-1.05

Price to Book (P/B)1.11

Price to Sales (P/S)1.33

P/FCF Ratio-7.91

Enterprise Value/Market Cap2.27

Enterprise Value/Revenue3.42

Enterprise Value/Gross Profit9.68

Enterprise Value/Ebitda9.94

Forecast

1Y Price Target

$52.50

Price Target Upside13.76% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EPS Forecast (FY)2.9

Revenue Forecast (FY)$1.33B

Northwest Gas Business Overview & Revenue Model

Company DescriptionNorthwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington. The company also operates 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers; offers natural gas asset management services; and operates an appliance retail center. In addition, it engages in the gas storage, water, non-regulated renewable natural gas, and other investments and activities. The company provides natural gas service through approximately 786,000 meters in Oregon and southwest Washington; and water services to a total of approximately 80,000 people through approximately 33,000 water and wastewater connections in the Pacific Northwest and Texas. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.

How the Company Makes MoneyNorthwest Gas generates revenue primarily through the sale and distribution of natural gas to its customers. The majority of its income comes from regulated utility operations, which allows the company to charge rates approved by state regulatory bodies. NWN also earns revenue from infrastructure investments, such as pipeline expansions and upgrades, which enhance its distribution network. Additionally, the company may have revenue streams from ancillary services, including energy efficiency programs and maintenance services. Partnerships with local governments and energy efficiency organizations further contribute to NWN's earnings by facilitating community programs that promote natural gas usage and conservation.

Northwest Gas Key Performance Indicators (KPIs)

Any

Operating Income by Segment

Operating Income by Segment
Shows profitability across different business areas, highlighting which segments drive earnings and where there might be challenges or opportunities.

Chart InsightsNorthwest Gas's operating income shows volatility, with the 'Natural Gas Distribution' segment experiencing significant fluctuations, including recent declines. However, the earnings call highlights strong customer growth and strategic expansions, particularly in Texas and through SiEnergy's acquisition. Despite increased operational and interest expenses, the company maintains positive earnings guidance, underpinned by successful rate case settlements and a robust CapEx plan. This suggests a strategic focus on long-term growth and stability, even amid short-term income challenges.

Data provided by:

The Fly

Northwest Gas Earnings Call Summary

Earnings Call Date:Nov 05, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 20, 2026

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook with substantial customer growth, a long-standing dividend increase, and favorable regulatory outcomes. However, higher interest expenses and seasonal earnings losses were noted as challenges.

Q3-2025 Updates

Positive Updates

Strong Customer Growth

The combined utility customer growth rate was 10.9% for the 12 months ended September 30, driven largely by gas utility acquisitions in Texas. Northwest Natural Water also posted a 4.1% increase in meter growth.

Dividend Increase

The Board approved a dividend increase, marking the 70th consecutive year of annual dividend increases. Northwest Natural Holdings is one of only three companies on the New York Stock Exchange with this record.

Constructive Regulatory Outcomes

Northwest Natural received a constructive order from the Oregon Public Utility Commission, resulting in a revenue requirement increase of $20.7 million and new rates effective October 31.

Texas Expansion and Legislation

SiEnergy posted a nearly 35% increase in customer backlog and is supported by Texas House Bill 4384, which enables real-time recovery of distribution investments.

Renewables and Water Utility Growth

Renewables business continues to deliver steady results, and the water segment showed a 4.1% customer base growth, including three small acquisitions.

Negative Updates

Higher Interest Expenses

The adjusted net loss of the other segment increased $0.14 per share compared to the same period last year, primarily due to higher interest expense at the holding company.

Seasonal Earnings Loss

A loss of $0.73 per share was reported for the third quarter of 2025, relatively unchanged from the loss of $0.71 per share for the same period in 2024, due to the seasonal nature of gas utility earnings.

Company Guidance

During the third quarter 2025 earnings call, Northwest Natural Holdings provided guidance indicating strong financial performance and future growth prospects. The company expects full-year 2025 results to surpass the midpoint of their adjusted earnings per share (EPS) guidance range of $2.75 to $2.95, driven by significant investments of over $330 million in gas and water systems supporting a 10.9% utility customer growth rate. This growth was bolstered by acquisitions in Texas, with their SiEnergy gas utility posting a 35% increase in customer backlog. The company reaffirmed a long-term earnings growth rate of 4% to 6%. Regulatory achievements included a $20.7 million revenue requirement increase approved by the Oregon Public Utility Commission, and a planned $42.4 million revenue increase in Washington. Northwest Natural Holdings remains committed to modernizing infrastructure and enhancing system resilience, with capital expenditures projected at $450 million to $500 million for 2025. The company celebrated its 70th consecutive year of dividend increases, underscoring its financial stability and commitment to shareholder value.

Northwest Gas Financial Statement Overview

Summary

Northwest Gas demonstrates stable revenue growth and profitability, but high leverage and negative free cash flow pose risks. The company needs to manage its debt levels and improve cash flow generation to enhance financial stability.

Income Statement

Positive

Northwest Gas shows a stable revenue growth trend with a TTM revenue growth rate of 2.25%. The gross profit margin is healthy at 34.82%, and the net profit margin is 7.94%, indicating profitability. However, the EBIT and EBITDA margins show room for improvement compared to industry leaders.

Balance Sheet

Positive

The company's debt-to-equity ratio is relatively high at 1.68, indicating significant leverage. Return on equity is moderate at 7.01%, suggesting efficient use of equity but with potential risk due to high debt levels. The equity ratio of 24.49% indicates a balanced asset structure.

Cash Flow

Neutral

Operating cash flow is positive, but the free cash flow is negative, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.52, showing some cash generation efficiency. However, the negative free cash flow to net income ratio highlights challenges in covering net income with free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.27B	1.15B	1.20B	1.04B	860.40M	773.68M
Gross Profit	447.62M	397.61M	423.87M	341.23M	329.12M	300.50M
EBITDA	435.69M	348.09M	344.49M	303.37M	264.09M	238.09M
Net Income	100.53M	78.87M	93.87M	86.30M	78.67M	76.78M
Balance Sheet
Total Assets	5.85B	5.23B	4.87B	4.75B	4.06B	3.76B
Cash, Cash Equivalents and Short-Term Investments	35.83M	38.49M	32.92M	29.27M	18.56M	30.17M
Total Debt	2.52B	1.96B	1.75B	1.68B	1.52B	1.34B
Total Liabilities	4.42B	3.85B	3.58B	3.57B	3.13B	2.87B
Stockholders Equity	1.43B	1.39B	1.28B	1.18B	935.15M	888.73M
Cash Flow
Free Cash Flow	-186.35M	-194.12M	-47.40M	-190.93M	-133.54M	-135.58M
Operating Cash Flow	246.44M	200.28M	279.95M	147.67M	160.35M	145.32M
Investing Cash Flow	-770.17M	-428.99M	-335.50M	-435.46M	-300.12M	-294.28M
Financing Cash Flow	512.76M	227.06M	64.21M	301.63M	131.44M	171.78M

Northwest Gas Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price46.15

Price Trends

50DMA

46.31

Negative

100DMA

43.61

Positive

200DMA

41.99

Positive

Market Momentum

MACD

0.09

Positive

RSI

40.42

Neutral

STOCH

10.51

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWN, the sentiment is Neutral. The current price of 46.15 is below the 20-day moving average (MA) of 47.79, below the 50-day MA of 46.31, and above the 200-day MA of 41.99, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 40.42 is Neutral, neither overbought nor oversold. The STOCH value of 10.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NWN.

Northwest Gas Risk Analysis

Northwest Gas disclosed 35 risk factors in its most recent earnings report. Northwest Gas reported the most risks in the "Production" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Northwest Gas Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWX	74 Outperform	$5.77B	12.45	5.42%	3.11%	-23.15%	157.45%
NWN	73 Outperform	$1.91B	18.33	7.20%	4.26%	11.27%	20.04%
OGS	67 Neutral	$4.72B	18.36	8.51%	3.45%	15.06%	12.27%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPK	64 Neutral	$3.25B	24.34	9.13%	2.11%	17.15%	15.00%
SR	64 Neutral	$4.86B	18.85	8.20%	3.87%	-4.50%	2.49%
CTRI	56 Neutral	$2.55B	913.57	0.45%	―	―	―

* Utilities Sector Average

Performance Comparison

NWN

Northwest Gas

46.15

6.20

15.52%

CPK

Chesapeake Utilities

127.17

2.14

1.71%

Spire

82.20

15.61

23.44%

SWX

Southwest Gas

79.81

6.53

8.91%

OGS

ONE Gas

76.78

8.10

11.79%

CTRI

Centuri Holdings, Inc.

26.30

4.83

22.50%

Northwest Gas Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance

Northwest Gas Gains Approval for Rate Increase

Neutral

Oct 28, 2025

On December 30, 2024, NW Natural filed a request with the Public Utility Commission of Oregon for a $59.4 million annual revenue increase, including $10 million for an updated depreciation study. Following negotiations with various stakeholders, a stipulation was reached, resulting in a $21.3 million increase, later adjusted to $20.7 million after final regulatory approval on October 24, 2025. The new rates, reflecting a capital structure of 50% equity and 50% debt, are expected to take effect on October 31, 2025.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Nov 07, 2025